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How To Measure Your Social Media Return On Investment

There’s no longer much doubt for small businesses regarding whether being on social media is a good idea. If nothing else, the visibility and connectivity offered by social media has convinced most business owners that it’s worth their while.

But just how much time and effort should it consume? While it may be easy for the average small business to say it’s worthwhile to be on FacebookFacebook, most would agree monitoring it and posting 24/7 would be a waste of resources. The only way to know how much social media is enough is to have some sort of gauge on your return on investment.

That’s not to say measuring ROI is a snap. Fast Company cites an Adobe white paper that says 88% of 750 surveyed marketing professionals didn’t feel they could accurately measure the effectiveness of their social media campaigns. Fifty-two percent said that dealing with social media ROI was their biggest frustration.

Here are a few ways to ease that annoyance. Though measuring social media ROI may not be perfect, it’s not impossible either. These three methods can help gauge what your small business is getting out of its social media commitment.

(Photo credit: iStockphoto)

Metric Tools

Facebook doesn’t limit page administrators to the data on their own admin panel. One example is Conversion Measurement, a Facebook tool that allows those who advertise on the platform to record the behavior ofthose who click on ads.

“If a customer clicks and then goes on your site to register, then you have proof that the ad was at least effective for that,” writes Todd Wasserman for Mashable. ”Of course, the ideal scenario is when a customer clicks through an ad and then buys something on your site.”

Wasserman says that tools used in combination can be more powerful, such as Conversion Measurement and OptimizedCPM, which helps Facebook ads target the right people. Already knowing who has clicked through your ads can make future ads even more effective. How effective? Wasserman says the company Fab used that same pair of tools to cut its new customer acquisition cost by 39%.

Interactions

It used to be that interaction was the only way to tell that your audience could hear you at all. Though the measurement seems to have lost its weight between impressions and likes, as Michael Cohn explains for Social Media Today, interactions are still very relevant — particularly when you understand what each one means.

“Every single comment, photo, video or post takes a few seconds for a user to digest,” writes Cohn. “It is estimated that the average ‘like’ on Facebook takes seven seconds per person while close friends of this person will take an average of five seconds to digest that ‘like.’”

Analyzing these numbers by how many likes were received, multiplied by how many friends of those likes witnessed the action give a more accurate — not to mention sunnier — idea of how far your message reached.

Analyzing Traffic

Your website’s analytics can tell you how often people find your page via Facebook or Twitter, but it’s not always easy to tell what actions on these social media cites have driven that traffic, or how much that traffic truly cost. By analyzing your website analytics against pay per click, or PPC campaigns, however, says John Souza for Fast Company, much more becomes clear.

“[Look] at the average cost of those PPC campaigns per person then analyze that cost against how many visitors you get from free social media placements,” Souza writes. “You can then put a dollar sign on the traffic you derive from Facebook pages, Twitter links and the like.”

Though no social media ROI measurement is perfect or comprehensive, neither are many measurements of ROIs in other PR and marketing efforts. Using these methods, and using them over time, will be revealing of current ROI, as well as create benchmarks against which to measure future social media efforts and strategies.

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